U-SHIN LTD. Business Report FY ended Dec. 2016

Financial Overview

(in million JPY)

FY ended Nov. 30, 2016

FY ended Nov. 30, 2015

Rate of Change (%)

Factors

Overall

Sales

153,894

164,229

(6.3)

-Production volumes and sales in Japan, China, Thailand and other Asian countries, and in the USA and Mexico also, were basically the same for the year. -New-car production volumes and new-car sales by some OEMs in Japan and Europe decreased-Expenses increased at the UMA business to deal with defective products in Slovakia -Costs increased in Europe due to expenses that were incurred with the launch of new products in Italy and the development of next-generation, new products in Germany -Production volumes fell in Brazil due to political and social unrest in the country -The effect of currency translation impacted sales results, which stemmed from a weak euro and weak currencies in developing countries

Operating profit

3,269

4,715

(30.7)

-

Ordinary profit

2,271

2,176

4.4

-

Net profit

(9,659)

226

-

-Expenses increased at the UMA business to deal with defective products in Slovakia

Automotive Components Division

Sales

131,422

141,366

(7.0)

-Lower business results in Europe -Effect of negative currency translation due to the high valuation of the yen

Operating profit

3,170

4,780

(33.7)

-

Outlook for FY ending Nov. 31, 2017

-The Company expects its sales to be JPY 154,400 million, and its operating profit to be JPY 4,910 million.

R&D Expenditure

R&D Structure

-The Company has domestic development operations in Hiroshima, Hamamatsu & Saitama in Japan.

-Engineers at R&D facilities in Japan, China, the U.S. and India are collaborating to develop products that meet the needs of each market quickly and efficiently.

Product Development

Power closure systems for rear gates-Compact spindle drive (CSD): a system that reduces noise and product weight. The CDS enables the rear gate (other than that of large vehicles) to open using a motor on just one side and a spring on the other side.

-StepGate: a system to open/close the rear gate automatically, without any need to touch the vehicle. A user can operate the system safely by stepping on the virtual button projected on the ground.

-Door edge protector: the system pops out as soon as a door is opened to provide a cushion strip along the most pronounced edge of the door. The protector prevents the door from causing damages like panel damages to the vehicle parked next to the car.

Door latches, keysets, electronic steering locks -The Company is aiming to develop lightweight door latches, keysets, and electronic steering locks where metal parts are widely used. The Company is also working on reducing operation noise and vibration to improve operability.

Door handles -The Company developed a mechanism that prevents the door from opening at the time of collisions.

Climate control switches -The Company continues its efforts to improve the operability and outer appearances of the switches.

Capital Expenditure

(in million JPY)

FY ended Nov. 30, 2016

FY ended Nov. 30, 2015

FY ended Nov. 30, 2014

Overall

4,265

6,447

7,666

-Automotive Components Division

4,098

6,207

7,444

-Major investment activities at the Automotive Component Division for fiscal year ended Nov. 2016 included spending on dies and production machinery.

Investment Outside Japan

-The Company said at a board meeting held on December 22, 2015 that the Company will establish a new Chinese subsidiary in February 2016. The new company will produce and sell automotive key sets. Its existing subsidiary in Wuxi City, Jiangsu Province, China, will be relocated to the new and larger factory to be built also in Wuxi. The new subsidiary will be capitalized at USD 30 million (approx. JPY 3.6 billion), 100% funded by U-Shin Ltd. (From an article in the Nikkan Jidosha Shimbun on December 25, 2015)